Wednesday, June 30, 2010

Clemency for Wall Street Criminals, Prison for the Powerless

A little help from a passive victim: Why did he hold still?

"Who the hell are these people?"

"I don't know. I used to say they were the same ones we've always had to deal with. Same ones my granddaddy had to deal with. Back then they was russlin' cattle. Now they're running dope. I ain't sure we've seen these people before. Their kind. I don't know what to do about 'em even. If you killed 'em all they'd have to build an annex on to hell."

Wachovia was deemed "too big to fail," and thus too important to prosecute. In our system, mercy is reserved exclusively for the powerful and corrupt, and Johnny Gaskins -- a criminal defense attorney -- was neither.

Gaskins had earned his money legitimately. As a dutiful tax victim, he reported his income to the criminal predators running the IRS. His purported offense was to make numerous deposits in amounts just under the $10,000 threshold at which banks are required to report to the IRS under the Bank Secrecy Act of 1970.

Punishment without a crime: Gaskins.

Displaying the proprietary blend of depraved creativity and utter dishonesty that typify their caste, federal prosecutors insisted that these innocuous acts constituted the alleged crime of "money structuring."

Dr. William Anderson, an economics professor at Maryland's Frostburg State University, notes that "money structuring" was defined as "an `ancillary crime' to give prosecutors leverage in cases where people had amassed huge amounts of cash via drug sales or other illegal activities and were trying to avoid detection as well as avoid paying taxes on their money."

In Gaskins's case, there was no predicate offense. The money was honestly earned and duly reported. Yet according to Pecksniffian federal prosecutor Randall Galyon, "The point of the law is to make sure we don't have people trying to fool the bank. The fact that he was trying is against the law."

Gaskins was trying to "fool" the bank about conduct that was not innately criminal. His violations of technical statutes constituted an offense of a severity comparable to ripping the tag from a mattress.

Yet the sacred majesty of the law requires that Gaskins suffer exemplary, conspicuous punishment.

As Dr. Anderson observes, there was an unambiguous element of payback behind this vindictive prosecution: "Gaskins had success representing people accused of crimes, and the police and prosecutors paid him back with what can only be a trumped-up charge. Remember, Gaskins was convicted of depositing money in a bank. He did not evade taxes, he did not gain his cash through illegal means, he just put the money in the bank."

For reasons unstated yet deafening in their obviousness, the same corps of federal prosecutors who went after Gaskins hammer and tongs last year displayed little of the same zeal in pursuing Wachovia Bank on charges that involve both deliberate fraud and financial collaboration with Mexican narco-criminal syndicates.

Although it proudly called itself "the nation's fourth-largest bank," Wachovia was actually a federally chartered criminal enterprise.

Granted, this can accurately be said of the entire fractional-reserve banking system. Wachovia distinguished itself by becoming a full-service institution to swindlers and criminals of many kinds.

In February 2008 it was revealed that Wachovia's corporate leadership "solicited business from companies it knew had been accused of telemarketing crimes," reported the New York Times. "Internal Wachovia e-mail messages, for example, show that high-ranking employees ... frequently warned colleagues about telemarketing frauds routed through its accounts."

Wachovia had been given specific warnings from investigators and from other banks regarding the scams, yet "it continued to provide banking services to multiple companies that helped steal as much as $400 million from unsuspecting victims."

A federal lawsuit against Wachovia accused the bank of accepting "fraudulent, unsigned checks that withdrew funds from the accounts of victims, often elderly," continues the Times. "Wachovia forwarded those checks to other banks that were unaware of the frauds, which in turn sent money to the swindlers."

One Wachovia executive warned in 2005 that one account being used by swindlers had received 4,500 complaints in the space of two months. "There is more," she wrote, "but nothing more that I want to put in a note."

Despite that warning and others, Wachovia continued to process the fraudulent transactions "partly because the bank charged fraud artists a large fee every time a victim spotted a bogus transaction and demanded their money back," the Times points out. "One company alone paid Wachovia about $1.5 million over 11 months...."

"We are making a ton of money from them," admitted Wachovia executive Linda Pera in 2005, referring to a company later accused of stealing $142 million through fraud.

The Bank Secrecy Act, recall, is the same law Johnny Gaskins "violated" by making small bank deposits of his own honestly-earned, fully reported money. Gaskins wasn't offered a deal in which he would "forfeit" an amount equivalent to pennies on the dollar and be spared additional punishment in exchange for the promise of future "good conduct."

According to the stipulations in the federal "Factual Statement" Wachovia endorsed last March, a Miami branch maintained "correspondent bank accounts" for Mexican currency exchange houses (casas de cambio, or CDCs).

"On numerous occasions, monies were deposited into a CDC by a drug trafficking organization," recounts the "Factual Statement." "Using false identities, the CDC then wired that money through its Wachovia correspondent bank accounts for the purchase of airplanes for drug trafficking organizations."

Among the offenses to which Wachovia stipulated are "Structured Wire Transactions" intended to launder drug proceeds. Once again, Gaskins was convicted of "money structuring" despite the fact that there was no underlying criminal act. Wachovia, on the other hand, was deliberately washing drug proceeds and facilitating the purchase of aircraft that were used to smuggle at least 22 tons of cocaine.

In 2006, Martin Woods, a Wachovia compliance officer in London, became suspicious when his branch started to receive a large quantity of traveler's checks issued by Mexican CDCs. The checks -- written for large denominations -- were sequentially numbered and improperly endorsed.

Recognizing this as evidence of money laundering, Woods reported his findings to Britain's Serious Organised Crime Agency. A year later, Mexican investigators traced those checks to a CDC used by the Sinaloa Cartel.

Martin's reward for breaking the case, observed the March 9, 2009 issue of Barron's, was to be bullied and demoted by his superiors at Wachovia, who also threw out his reports of similar suspicious activities in eastern Europe. As was the case with the telemarketing fraud, the dirty dealings Martin had uncovered were much too profitable to stop -- and in this case, they were being overseen by people who make Anton Chigurh look like Mr. Rogers.

Only those so ingenuous as to make Candide look worldly would be surprised to learn that the same individual, and the same aircraft, were involved in smuggling drugs into the United States, or that the CIA found even more repellent uses for the same vehicle.

Mr. "Smith" was the Gulfstream's owner of record between 2003 and 2005, when the plane was used by the CIA for at least three trips between the east coast of the U.S. and the prison camp at Guantanamo Bay.

"In 2004, another torture taxi crashed in a field in Nicaragua with a ton of cocaine aboard," the Independent recalls. "It had been identified by Britain and the European Parliament's temporary committee on the alleged use of European countries by the CIA for the transport and illegal detention of prisoners as a frequent visitor in 2004 and 2005 to British, Cypriot, Czech, German, Greek, Hungarian, Spanish and other European cities with its cargo of captives for secret imprisonment and torture in Iraq, Jordan and Azerbaijan."

To cite Bastiat's invaluable formula yet again, both of those "wars" are exercises in creating the poison and the antidote in the same laboratory.

The "war on drugs" -- which is an exercise in corrupt, murderous foolishness greater, by several orders of magnitude, than Prohibition -- will not end as long as it is profitable to the criminal elite in Washington, their allies in the banking industry, and their largely interchangeable and thoroughly disposable minions in the underworld. As Hugh O'Shaughnessy of The Independent puts it, decriminalization of drug use would impoverish "the traffickers, large and small, and those who have been making good money building and running the new prisons that help to bankrupt governments -- in the US in particular, where drug offenders -- principally small retailers and seldom the rich and important wholesalers -- have helped to push the prison population to 1,600,000."

That population will soon include Johnnie Gaskins, a principled but powerless man who committed no crime. The majesty of the law requires nothing less. None of the criminals in Wachovia's corporate leadership will be joining him behind bars, of course, since clemency is a gift the Regime bestows exclusively on its valued accomplices in official crime.

Gotta hand it to you Mr. Grigg, this is some top notch work as usual. Normally I refuse to read long posts, but I always make time for you.

Aside from my rump kissing, I would say that the actions of Wachovia are not surprising. It has become ever more difficult to tell apart the regime from their corporate cohorts as the administrations come and go. The CIA on the other hand is well known (not well enough though...) for its drug smuggling operations, unfortunately not much can be done about them other than drying up the pond from which they suck.

"They write the checks and you get stuck with the bills, they get the access while you get to write a letter, they think they own this government, but we're here today to take it back. The time for that kind of politics is over." B-Ho announcing his Intentions for presidency February 2007

Mr. Grigg this is perhaps your greatest essay yet at showing us what Government and Law enforcement actually does as opposed to what it claims to do. It is a bought and paid for Crminal syndicate which is not necessary for civiliazation to grow and prosper, and is actually detrimental to that prospering.

Thanks, Will, for providing us with yet another reason to abandon banks altogether and start stuffing our GOLD AND SILVER COIN under our mattresses.

I certainly wasn't surprised at this paragraph:

Despite that warning and others, Wachovia continued to process the fraudulent transactions "partly because the bank charged fraud artists a large fee every time a victim spotted a bogus transaction and demanded their money back," the Times points out. "One company alone paid Wachovia about $1.5 million over 11 months...."

As you recently pointed out here, there is no longer ANY incentive whatsoever for corporations, especially the larger ones, to obey the law or even act in the fundamental best interests of their so-called "customers," ever increasing numbers of whom are captives of these de facto monopoly trusts. Indeed, the perpetration of fraud has become the only growth industry in a nation strangled by repressive regulation and taxation, all enacted to benefit the Wachovias, Wells Fargos, Citibanks, Chasebanks, and other beneficiaries of the TBTF world of finance, all of which have had their claws anchored in the flesh of the political classes for well over a century and a half (to the extent, that is, that there has ever been any difference between the two to begin with).

My advice to everyone who holds any kind of long-term debt, whether secured or unsecured, is to accelerate its payoff (or, in the case of a home mortgage, consider strategic default) IMMEDIATELY and close any accounts after they are paid in full. Sure, it might "damage your credit rating," but given the coming implosion of the credit markets, the initial stages of which we're seeing unfold before our very eyes right now, it won't matter in the long run. Better to close ANY avenues by which these slimy criminal syndicates can extort from you more of your hard-earned wealth than to rely on them for a financial safety net. If nothing else, maybe this horrifying trend will convince you of the wisdom of this course of action better than anything else.